Colorado tax-cutting initiatives raise anxiety

Josh Penry is something of a hero to the tax-cutting movement — leader of Republicans in the Colorado state Senate at age 33, and a “tea party” favorite for the GOP gubernatorial nomination until he agreed to drop out to clear the way for a more experienced candidate.

Yet Penry is one many Colorado Republican legislators and leaders opposing a trio of tax-cutting initiatives on the ballot in November. The nonpartisan Legislative Council here estimates that the measures, when fully implemented, would cut the state’s $7-billion budget virtually in half, leaving enough to fund only public education.

“Tax-cutting conservatives have an obligation to call this what it is, so it doesn’t give us a bad name,” Penry said in an interview. “It’s an over-reach.”

In a year when anti-establishment sentiment is reaching new heights, Colorado’s tax-cutting initiatives will test voters’ willingness to whittle down government.

Proponents of the measures disagree with the Legislative Council analysis, saying it is pure alarmism by the government. They note that one of the cuts, a gradual drop in the state income tax by 25%, would kick in only if tax revenue grows strongly from year to year. “These will be good for Colorado, and we believe it will boost the economy,” said Natalie Menten, a spokeswoman for the “yes” campaign.

Menten said the initiatives were a reaction to the Democratic governor and Legislature’s use of various fees to balance the budget and evade restraints on taxes created under a 1992 tax-limitation ballot measure known as TABOR, for Taxpayer Bill of Rights.

But many of the changes go well beyond rolling back the hikes of the last two years. The state increased the cost of registering vehicles last year by up to $41 for a passenger car. One component of the measures would cap all vehicle registration fees at $10 — the amount it cost in 1919.

Another would flatly prohibit all borrowing by the state and require every act of local borrowing to be put to a vote. A third component, stemming from frustration at increases in some property tax payments over the last couple of years, would halve the property taxes that fund schools.

Opponents include most business and labor groups in the state, as well as a large, bipartisan group of elected officials. They have raised $5 million to fight the initiatives and began airing commercials last week. In contrast, proponents have raised less than $15,000. Menten handles media calls from the auto repair shop she and her husband own in a Denver suburb.

“We’ve got regular day jobs. We don’t get paid tens of thousands of dollars to go out and campaign,” Menten said.

Floyd Ciruli, a Denver-based pollster, conducted the only published poll so far on the measures’ viability. He found in August that only one, Proposition 101, which lowers income taxes and fees, hovered at 50%. The others polled low, but with large numbers undecided.

Ciruli said that leaves him to believe the measures are doomed. “They were so poorly positioned and they were written so aggressively over-the-top,” he said.

But many active in the campaign against the measure say no one can take for granted that they will lose, especially in a year expected to draw a high number of conservative, anti-tax voters. “It’s a strange year,” said Dan Hopkins, a spokesman for the “no” campaign. “You’ve got an angry electorate.”

That was clear at a debate on the measures last week before the Lincoln Club of Denver, a Republican gathering. Representing the “no” side was Henry Sobanet, budget director for former Republican Gov. Bill Owens. He compared the measures to “using a flamethrower to remove a wart.”

Representing the initiatives’ supporters was Greg Golyansky of the Colorado Union of Taxpayers, whose one-liners bashing Democrats and government drew enthusiastic applause. “I was always told as a little kid that when you take someone else’s money, it’s theft,” he said, contending that the recent fee hikes were illegal. “We cannot live in a society where government does not obey the law.”

Vincent Pasale, 59, left the debate planning to support the initiatives. He called the projections of huge cuts “scare tactics,” adding that he wasn’t enamored of government-run schools or government-built roads. “We are incapable of trusting our state Legislature to spend our money,” said Pasale, a benefits manager who is unemployed. “I’m angry and have a lot of time on my hands.”

Twenty-eight of the 41 Republicans in the current Legislature have signed a letter opposing the initiatives. The GOP gubernatorial nominee, Dan Maes, who won with “tea party” backing, supports only one of the three measures. Tom Tancredo, the conservative former Republican congressman running for governor as an independent, initially said he supported the initiatives but has since backed away from them.

Penry predicted that, should the measures take effect, the chaos would lead voters to reject any other tax limitation measures. “It would create such a backlash that we’ll lose TABOR altogether,” he said. “It’s classic ready, fire, aim.”

nicholas.riccardi@latimes.com